Antofagasta Minerals views Encierro as one of the most important Cu porphyry discoveries in the El Indio-Maricunga belt
Antofagasta Minerals S.A. (LSE: ANTO) chose this year’s PDAC event in June to report that drilling and surveys in the previous year had allowed it to update the MREs for its Encierro and Cachorro projects, which it has been exploring since 2016.
Encierro has inferred resources of 522mt @ 0.79% CuEq at a cutoff of 0.5% CuTEq and a total inventory of 2,4BT @ 0,56% CuEq with cutoff of 0,35%, while Cachorro hosts inferred resources of 155mt @ 1.2% Cu, previously estimated at 142mt in December 2021.
Despite the prior MREs and the number of years generating exploration results at these projects, the company stresses that both projects are recent discoveries published for the first time only this year now that the corresponding statement have been reported in line with the most demanding standards in the industry, including external audit by an internationally certified company.
AMSA global exploration manager Sergio Giglio explained to Chile Explore Report that the Encierro update qualifies as a new discovery because previous exploration by Barrick was focused primarily on gold and targeting only 500m depth. Encierro is a joint venture with Barrick in which AMSA has majority ownership.
“We were more concerned with finding a high-grade resources suitable for eventual subterranean mining, grading in the order of1%. And while Barrick’s drilling did demonstrate Cu vectorization at depth, it’s our drilling that discovered the high-grade porphyry system and hydrothermal breccias,” he noted.
Antofagasta really started reporting Cachorro exploration results in early 2022. “It’s in an area with zero historic drilling, practically 100% covered by gravel. There were some indications at the edge of another property, but in terms of greenfield exploration it’s completely blind,” Giglio affirmed, adding that it’s very different from the typical announcement where an existing asset has been redefined or a junior has improved on the results of a prior owner. Also, the nearest mining infrastructure is 60km away, with Antucoya to the north and Centinela to the east.
In the next few years, however, the company expects to take a more brownfield approach to further exploration of properties that it controls in the Cachorro package, and current campaigns continue with delimitation work and probing for new satellite bodies in the immediate vicinity of the reported deposit, Giglio confirmed.
“We have much greater potential there than has been reported, but our policy is not to report until we can safely say that potential resources are at least in the inferred category and have completed the external audit process carried out by an internationally certified company. We have five rigs drilling there now, and we continue to run geophysics, geology and target definition campaigns, so you can expect another update in the annual report at the end of the year,” the executive added.
At Cachorro, AMSA has been drilling roughly 60,000m per year and at Encierro up to 9,000m annually, more limited because they are deeper holes and can only be drilled in
the summer months. Encierro drilling to date totals 47,970m. Giglio expects this rate of drilling to be maintained at both sites during 2022 and 2023.
PERU IN AMSA’S SIGHTS
AMSA recently announced an increased focus on exploring for early-stage generative opportunities in Peru, in order to reinforce its portfolio of long-term projects. At the Perumin expo in October Antofagasta CEO Iván Arriagada played down the amount budgeted for this, however Giglio noted that the overall budget for international exploration has been strengthened, allowing for a similar strategy in North America as well.
In 2021, AMSA’s exploration and evaluation expenditure – which includes expenditure on pre-feasibility studies – was US$103mn, up 21.3% compared to 2020’s figure of US$85mn. In 2019 the figure was US$111mn.
While some view Arriagada’s announcement as an attempt to warn the Chilean government that other jurisdictions could prove more attractive should royalty modifications prove too extreme, Giglio drew attention to the exploration section of AMSA’s 2021 annual report, which clearly alluded to the need to prepare for the future. That and his comments to Chile Explore Report came well before Perumin.
The emphasis in Peru will be on greenfield, while in North America AMSA will be open to partnerships with juniors, JVs or optioning agreements. And in both jurisdictions AMSA will be looking for projects capable of producing at least 50,000t of processed copper per year for at least 10 years, Giglio said, specifying that this narrows it down to Cu-Au, Cu-Mo and Cu-Ag porphyries, IOCG and Manto deposits.
The strategy will therefore require an in-depth analysis of socio-environmental conditions and local infrastructure, as well as the geological aspects, he added.
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